Collegiate athletic conferences serve multiple functions, including providing regular opportunities for members to compete in a relatively equitable environment and contributing to the financial well being of member institutions. Many conferences have undergone realignment in recent years, and the effects of those changes may impact the degree to which conferences realize those desired outcomes. The purpose of this paper is to assess how the churning of various institutions (i.e., changes in conference membership as institutions leave or are added) within Conference USA over a 10-year period affected the conference’s men’s basketball programs in regard to success at the national level and competitive balance within the conference. Both national success and competitive balance within the conference can significantly impact the financial well-being of the conference. Results of the study indicate decreases in both the competitive success of the men’s basketball programs at the national level and the in-conference competitive balance between the 2000-2001 through 2004-2005 and the 2005-2006 through 2009-1010 time periods.
**Key Words:** college athletics, competitive balance, conference realignment, basketball, conference USA
While amateur athletic conferences serve many functions for the individual member institutions, one important purpose is to attempt to enhance the financial status of their members. Although there are numerous ways this can be achieved, two important ways include (1) an attempt to accumulate a group of conference teams that are successful nationally against teams from rival conferences, and (2) an effort to insure teams are somewhat evenly matched within the conference—what is referred to as competitive balance.
Both winning against non-conference opponents and competitive balance are important as they tend to enhance the financial status of conference members. Indeed, “everyone loves a winner,” and is willing to attend games featuring successful teams more often and pay more to attend. Likewise, while people want their teams to win, fans like the games to be exciting and not a foregone conclusion as to the winner (5, 9, 12, 17, and 18).
Almost all major college athletic conferences have experienced changes in their membership within the last six years. These changes—commonly referred to as churning as members come and go—impact conferences in many ways. Competitive success at the national level and in-conference competitive balance are among the desired outcomes commonly impacted.
The purpose of this study was to assess how churning within Conference USA over a 10-year period has affected the conference’s men’s basketball programs in regard to success at the national level and competitive balance within the conference. The study is important because it assesses the impact of churning on two key but unrelated dimensions. A conference may be well balanced competitively but have negligible success at the national level. Conversely, a conference may be highly unbalanced, but the few teams who win consistently in-conference, may also enjoy considerable success at the national level. This can provide considerable financial rewards for the conference.
Competitive success at the national level and the financial well-being of conference members are inextricably linked because the number of teams a conference places in the NCAA national championship tournament and the number of victories those teams accrue determine the NCAA’s payout to participating conferences. Other studies have examined the effects of churning on competitive balance (see, for example, 13-15, 18) or the relationship between realignment and program revenue (8). This project is the first to combine both considerations, allowing for a more comprehensive assessment of churning outcomes.
### Related Literature
College conferences are comprised of college and universities that have established an association, one of the purposes of which is regular athletic competition (1). In 2011, Staurowsky and Abney (20) stated conferences “establish rules and regulations that support and sustain a level playing field for member institutions, while creating in-season and postseason competitive opportunities” (p. 149). And Rhoads (18) has observed that “(i)t is reasonable that conferences should be quite active in ensuring optimal levels of competitive balance” (p. 5).
Sustained competition among equitable teams is not the sole purpose of athletic conferences, however. Depken (4) observed:
> Sport leagues exist, in part, to insure profitability of their member franchises. Although the NCAA specializes in amateur sports, in which players do not receive direct salaries for their athletic performance, it is readily apparent that the schools that comprise the NCAA are often anxious to earn as much profit as possible from the sports programs (p. 4).
College athletic conferences contribute to their member institutions’ revenue by distributing rights fees from media agreements, corporate sponsorships, licensing and other forms of revenue received by the league (7). One source of revenue for NCAA Division I conferences are distributions from the annual Division I Men’s Basketball Championships. Payouts to conferences are based on financial values linked to units, which are accrued each time a conference member plays a game in the tournament (22). For example, a conference member advancing to the third round (i.e., “Sweet Sixteen”) is valued at three units. Payments to conferences are based on six-year averages of the financial values associated with units accrued (22).
#### Conference Churning
As illustrated in Table 1, 10 of the 11 conferences in the NCAA Division I’s Football Bowl Subdivision (FBS) experienced membership changes between 2005 and 2011. Additional changes at the FBS level are planned for 2012, and Quirk (16) has observed similar instability among non-FBS Division I conferences. Fort and Quirk (6) argued that football is the predominant consideration when institutions change conference affiliations. Competitive imbalance in existing conferences often results in churning because enhanced competitive balance is linked to desirable financial outcomes. Other scholars (5, 9, and 17) support that argument, observing that consumer uncertainty of a game’s outcome is linked to increased demand. Rhoads (18) specifically linked competitive balance with increased ticket sales and enhanced television rights fees.
Little scholarly attention has been devoted to effects of conference churning on competitive success against non-conference opponents. Minimal research has been devoted to evaluating conference realignment in terms of financial outcomes. One exception is Groza (8), who found FBS teams that changed conferences enjoyed an increase in attendance, even controlling for increased quality in competition. Of course, ticket sales (i.e., attendance) is only one of many financial factors that may be impacted by churning. Others include, but are not limited to, BCS and other bowl related revenue, NCAA tournament payouts; media rights fees, athletic donations, and corporate sponsorship fees.
Several studies have been conducted assessing the effects of conference churning on competitive balance within select sport programs. Rhoads (18) examined the Western Athletic and Mountain West conferences and found that membership changes in those conferences had resulted in enhanced competitive balance in football. The changes had no impact on competitive balance in men’s basketball however. Perline and Stoldt (13-14) conducted two studies focusing on competitive balance before and after the Big 8 Conference expanded to become the Big 12. Their first study focused on men’s basketball, for which they concluded that competitive balance within the sport decreased after the conference’s expansion (13).Their second study centered on football, for which they concluded that competitive balance improved after the merger (14). The same scholars also examined competitive balance in women’s basketball before and after the merger between the Gateway Collegiate Athletic Conference and Missouri Valley Conference (15). Multiple methods of assessing of competitive balance produced mixed results, with more measurements indicating more competitive balance after the merger.
#### Conference USA: History and evolution
Conference USA (C-USA) was formed in 1995 during a time of great upheaval in college athletics, which included the dissolution of the Southwest Conference and the formation of the Big XII in 1996 (21). C-USA is a Division I-A league that is divided into two competitive divisions: East and West. In the eastern division members include East Carolina University, Marshall University, the University of Memphis, Southern Mississippi University, University of Alabama- Birmingham, and the University of Central Florida. The western division includes the University of Houston, Rice University, Southern Methodist University, Tulane University, the University of Tulsa, and the University of Texas- El-Paso (2).
Since its inception in 1995, C-USA has endured much change. In the beginning the conference consisted of the University of North Carolina-Charlotte, the University of Cincinnati, DePaul University, the University of Houston (starting competition in 1996), Marquette University, the University of Memphis, Tulane University, St. Louis University, University of Alabama- Birmingham, and the University of Southern Florida. Mike Slive was appointed as the first commissioner, but left to become the commissioner of the Southeastern Conference in 2002 (19), leaving C-USA to appoint Britton Banowsky as its new commissioner. Additionally, in 2002, the C-USA headquarters moved from Chicago to Irving, Texas (2).
The major realignment of C-USA in 2005 was set in motion by larger conference realignment issues. The Atlantic Coast Conference’s (ACC) desire for football prestige triggered a mass reordering of conferences (23). Specifically, the ACC invited the University of Miami (FL), Virginia Polytechnic and State University, and Boston College to join their conference, thereby depleting the Big East Conference. In order to reestablish its conference, the Big East invited C-USA members the University of Cincinnati, DePaul University, Marquette University, the University of Louisville, and the University of South Florida (11). Additionally, four other institutions relinquished their C-USA memberships in 2005. Texas Christian University left to join the Mountain West Conference, the University of North Carolina-Charlotte and St. Louis University left to join the Atlantic 10 Conference, and the U.S. Military Academy (aka Army) became independent [11). Figure 1 lists the various institutions that have been members of C-USA, the dates of their memberships, and their current conference affiliations.
Crytzer (3) noted the unusual current geographical size of C-USA (over 1,500 miles separate the eastern most and western most schools) is a barrier for many of the member schools, which range in student population from 5,000 to 50,000. Additionally, conference defections over the past 15 years helped fuel speculation that future NCAA conference realignments could render C-USA obsolete.
The purpose of this paper was to assess how churning within Conference USA over a 10-year period has affected the conference’s men’s basketball programs in regard to success at the national level and competitive balance within the conference. We employed two tactics each in evaluating winning success nationally and competitive balance.
#### Winning Success
In order to measure winning success, we measured the success of Conference USA teams against outside competition before the departure of teams in the 2004-05 season and after the addition of teams in the 2005-06 season. While the conference mean will always be .500, the non-conference mean could vary. We also measured the number of Conference USA teams that participated in the NCAA post-season tournament in both periods. The latter was a major source of revenue to the conference and ultimately to each team. The value of each appearance in the tournament varied from $94,086 in 2001 to $222,206 in 2010 and has continued to grow in magnitude over time. These values were paid annually for six years. Thus one appearance in 2001 would be worth $564,516 to the conference and one appearance in 2010 would be worth $1,333,236 to the conference over the six-year period. It is, therefore, readily apparent that the more appearances a conference makes in the tournament, the more revenue it receives.
#### Measuring Competitive Balance
There were several methods used in measuring competitive balance. The most appropriate of these methods depended on what the researcher was attempting to specifically measure (9). Methods most appropriate for measuring competitive balance within a given season may be different from those used to measure competitive balance between seasons (10). To measure competitive balance within a given year, we rely on the standard deviation of winning percentages and to measure competitive balance between seasons, we use the Hirfindahl-Hirschman Index (HHI).
##### Standard Deviation of Winning Percentages
Possibly the method most often used to measure competitive balance within a conference in a given season is the standard deviation of winning percentages. Since there will, outside of a tie, always be one winner and one loser for each game, the average winning percentage for the conference will always be .500.
In order to gain insight into competitive balance, we would need to measure the dispersion of winning percentages around this average. To do this we can measure the standard deviation. This statistic measures the average distance that observations lie from the mean of the observations in the data set. The formula for the standard deviation is:
The larger the standard deviation, the greater is the dispersion of winning percentages around the mean, and thus the less competitive balance.
#### Championship Imbalance
While using the standard deviation as a measure of competitive balance provides a good picture of the variation within a given season, it does not indicate whether it is the same teams winning every season, or if there is considerable turnover among the winners, i.e., whether there is between season variation. Therefore, another method economists have used to measure imbalance is the Hirfindahl-Hirschman Index (HHI), which was originally used to measure concentration among firms within an industry ([10). We determine the HHI by counting the number of times a team won a championship during a given period, summing those values and then dividing by the number of years in the period considered.
Using this method, the greater the number of teams that achieve championship status over a specific time period, the greater would be the competitive balance.
#### Winning Success
Table 3 gives the winning percentages for Conference USA teams against non-conference opponents in the two periods under consideration. For the earlier period the mean winning percentage was .606 and for the latter period it was .577—an approximate 5% differential favoring the earlier period. It should be noted that the highest winning percentage over this total period was .638 (2003-04) and the lowest was .539 (2005-06). The data suggest that Conference USA was more successful against outside competition in the earlier period.
Table 4 reflects the number of Conference USA members participating in the NCAA post-season tourney, the unit value of each appearance and the dollars received in each year from conference participation. The data in Table 4 indicates that in the 2001-05 period the conference received $30,722,250, and in the 2006-10 period the conference receipts were only $21,269,388. These numbers reflect a participation of 39 appearances in the earlier period and 19 in the latter period. Consequently, even though the dollars per unit were considerably higher in the latter period, the conference earned almost $10 million more in the earlier period.
#### Competitive Balance
##### Standard Deviation of Winning Percentages
Tables 5 and 6 display the winning percentage for men’s basketball for the years 2000-01 through 2004-05 and for 2005-06 through 2009-10. Table 7 displays the standard deviations for both time periods.
As shown in Table 7, the mean standard deviation was .208 for 2000-01 through 2004-05, and it was .250 for 2005-06 through 2009-10. As indicated above, the lower the standard deviation the greater the competitive balance. This is a 20.3% difference favoring competitive balance in the earlier period. It should also be pointed out that not only was the mean standard deviation lower for the earlier period, but the lowest standard deviation for the period, .173 (2000-01), was lower than the lowest standard deviation for the later period, .238 (2006-07). Likewise the highest standard deviation for the later period, .261 (2009-10) was higher than the highest standard deviation, .236 (2003-04) in the earlier period. As a matter of fact the standard deviation was lower every year of the earlier period than for the later period.
Why the standard deviation was lower for the earlier period can also be seen by the range of the means in the two periods. As indicated in Table 5 (the earlier period) the range was a high of .725 (Cincinnati) and a low of .266 (East Carolina). This was a range of .459 from top to bottom of the standings. On the other hand, and as indicated Table 6 (the latter period), the means ranged from a high of .948 (Memphis) to a low of .216 (East Carolina). This was a range of .732 from top to bottom. Indeed in this period Memphis had a perfect record of 16-0 in three of the five years investigated, while two teams, East Carolina and SMU, had losing records all five years.
##### Championship Imbalance
Using the data from Table 8 to construct the HHI to measure competitive balance between the two periods we find the results are consistent with the results found when using the standard deviation. Using the regular season standings we find that during the 2000-01 through 2004-05 period (see Table 8), three teams–Cincinnati, Marquette and Louisville–won the championship once each. Multiple teams shared the title for two seasons–2001-02 when Cincinnati and Southern Mississippi tied and 2003-04 when there was a five-team (DePaul, Memphis, Cincinnati, UAB and Charlotte) tie for first. If we give one point for each outright championship, .5 for a two-team tie, and .2 for a five-team tie, we find:
HHI = 1.72 + 12 + 12 + .52 + .22 + .22 + .22 + .22= 2.89 + 1 + 1 + .25 + .04 + .04 + .04 + .04 = 5.3/5 = 1.06
When measuring the HHI over the 2005-06 through 2009-10 period (see Table 8), we find considerably less competitive balance. During this period one team, Memphis, won the regular season championship four times and another team, UTEP, won the championship the other year. Measuring these results we find:
HHI= 42 + 12 = 16 + 1 = 17/5 = 3.4
These calculations indicate less competitive balance during the 2005-06 through 2009-10 period.
The results of this study offer strong evidence that the churning that occurred in C-USA over the 10-year period 2000-2001 through 2009-2010 had negative effects for men’s basketball in terms of both competitive success at the national level and competitive balance within the conference. Both of the indicators of national success—winning percentage against non-conference opponents and revenue derived from member appearances in the national championship tournament—were better during the earlier period than the latter. In addition both measures of competitive balance within the conference—standard deviation of winning percentages and the HHI—indicate more competitive balance in the earlier period.
It is also important to note that while this study examined the financial ramifications of C-USA’s success, or lack thereof, in the men’s basketball national championship tournament, that revenue stream was but one of several that determine the overall financial well-being of the conference and its members. However, Crytzer (3) has observed that as the financial benefits of the C-USA’s success in men’s basketball from 2003-2005 in particular run out, the conference’s long-term viability may be at risk. Clearly, multiple factors relating to a variety of sport programs will affect whether C-USA is susceptible to additional churning and/or will even survive. However, the findings of this study pertaining to one flagship sport, men’s basketball, indicate the conference faces significant challenges in the near future.
### Applications In Sport
While the results of this study are not to be generalized to other sports programs or other conferences, they do align with the findings of other studies that have examined the effects of conference churning on competitive balance in men’s basketball. While Rhoads (9) found realignment in the Western Athletic and Mountain West conferences had enhanced competitive balance in football, it did not have the same positive effect in men’s basketball. And two studies on the effects of churning in the Big 12 found improved competitive balance in football (14) but diminished competitive balance in men’s basketball (13). Since football is recognized as the primary factor in conference realignment (6), it may be that conference churning commonly results in desirable outcomes for that one sport program while others (i.e., men’s basketball) do not enjoy the same benefits. Given the potential for revenue generation in men’s basketball, and perhaps a few other sport programs aside from football (depending on the institution), the appeal of competitive success on a national level, and the importance of in-conference competitive balance, university and college leaders are well advised to consider likely ramifications for multiple sport programs when considering conference affiliation options.
|Atlantic Coast Conference||2005||Boston College joins|
|Big East Conference||2011||Texas Christian joins|
|Big Ten Conference||2011||Nebraska joins|
|Big 12 Conference||2011||Two institutions withdraw|
|Conference USA||2005||Five institutions join, four withdraw|
|Mid-American Conference||2007||Temple joins as football-only member|
|Mountain West Conference||2011||Two institutions withdraw, Boise State joins|
|Pac-10 Conference||2011||Two institutions join|
|Southeastern Conference||1990||Two institutions join|
|Sun Belt Conference||2010||New Orleans withdraws|
|Western Athletic Conference||2011||Boise State withdraws|
#### Table 2
Evolution of C-USA, 1995-2011
|UNC Charlotte||1995-2005||Atlantic 10|
|St. Louis||1995-2005||Atlantic 10|
|Southern Florida||1995-2005||Big East|
|Texas Christian||1999-2005||Mountain West1|
1. Moving to the Big East in 2011-2012 season
#### Table 3
Conference Winning Percentage in Games Against Non-Conference Opponents
#### Table 4
NCAA Tournament Appearances and Related Revenue
|Year||NCAA Appearances||Unit Volume ($)||Yearly Value ($)||6 Year Value ($)|
#### Table 5
Winning Percentage for Men’s Basketball Teams, 2000-01 through 2004-05
#### Table 6
Winning Percentage for Men’s Basketball Teams for 2005-06 through 2009-10
#### Table 7
Standard Deviation for Winning Percentages
|5-Year Mean SD||0.208|
|5-Year Mean SD||0.250|
#### Table 8
Regular Season Conference Champions, 2000-01 through 2004-05
|2000-01||Cincinnati, Southern Mississippi|
|2003-04||DePaul, Memphis, Cincinnati, UAB, Charlotte|
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### Corresponding Author
G. Clayton Stoldt
Wichita State University
Department of Sport Management
Wichita, KS 67260-0127
P: (316) 978-5441
Martin Perline is a professor and Bloomfield Foundation fellow in the Department of Economics at Wichita State University. G. Clayton Stoldt is chair and professor in the Department of Sport Management at Wichita State University. Mark Vermillion is an assistant professor in the Department of Sport Management at Wichita State University.